Jafza records double-digit growth in retail and e-commerce tenants

Free zone houses more than 1,000 retail and general trading companies

Jebel Ali Free Zone, one of the biggest trading hubs in the region, recorded 10.6 per cent increase in customer base in the retail and e-commerce sector with the total trade value reaching Dh37.6 billion in 2019. AFP . AFPShow less

Jebel Ali Free Zone (Jafza), one of the biggest trading hubs in the region, recorded 10.6 per cent growth in customers from the retail and e-commerce sector in 2019, with total trade value from the sector reaching Dh37.6bn, the free zone authority said. It did not give a comparative figure for the sector's trade value in 2018.

More than 1,000 retail and general trading companies from 96 countries operate in Jafza, with 39 per cent of these coming from the Middle East region, 30 per cent from Asia, 15 per cent from Europe and 9 per cent from North America, among others. In total, these businesses employ more than 10,000 people, the authority said.

“The e-commerce business sector was issued the highest number of licences in the UAE during May 2020,” Mohammed Al Muallem, chief executive of Jafza and of parent company DP World's UAE region. “The first five months of the year saw a 300 per cent increase in consumer demand for e-commerce services. It’s quite clear consumers have discovered a new way of purchasing, as data shows the amount spent online has increased and we are here to leverage this behavioural trend.”

The demand for online shopping is growing across the world due to higher internet penetration. Global e-commerce sales grew to $25.6 trillion (Dh94tn) in 2018, up 8 per cent on the previous year, according to an estimate by the United Nations Conference on Trade and Development in April.

Movement restrictions to prevent the spread of the coronavirus pandemic has led to further growth in the industry.

“The recent pandemic has caused a shift in consumer buying habits, a behaviour that impacted a positive outcome proving that the internet is the major catalyst in shaping human lives,” Mr Al Muallem said.

Jafza recently introduced a range of incentives to support companies that are restarting operations as coronavirus-related restrictions ease in the emirate.

Existing and new customers will be able to lease warehouses on a short-term basis, with no value-added tax or customs duties, Jafza said last month.

Companies can lease Jafza warehouses ranging from 300 square metres to 15,000 sq m in size, with free water and electricity as part of the package. It also introduced flexible terms like monthly rental payments and offered to defer payments for tenants currently leasing warehouse facilities.

In March, the free zone slashed business-related fees by up to 70 per cent for existing tenants as well as new investors to help them cope with the economic fallout of coronavirus pandemic.

"We, at Jafza, are working closely with retailers to help transfer their stores into online platforms. Moving on, further studies need to be done in order to evaluate and plan a rebound of the economy keeping in mind that online shopping is a natural progression and is now a part of nearly every consumer’s life," Mr Al Muallem said.